Australia Inflation Rate Edges Down To 1.9% In Q2

Consumer prices in Australia rose 1.9 percent through the year to the June quarter of 2017 from 2.1 percent in the first quarter and below market consensus of a 2.2 percent rise. The inflation rate edged lower from the 2-1/2 year high in Q1, mainly due to a slowdown in cost of housing and transport.

Year-on-year, cost increased at a slower pace for: housing (2.4 percent from 2.5 percent in Q1), transport (2.1 percent from 3.8 percent) and insurance and financial services (2.1 percent from 2.7 percent). Cost went up more than in the prior quarter for food and non-alcoholic beverages (1.9 percent from 1.8 percent) while were steady for: alcohol and tobacco (5.9 percent), health (3.8 percent) and education (3.3 percent). In contrast, cost fell for: clothing and footwear (-1.9 percent from 0.3 percent); communication (-3.8 percent from -4.8 percent) and recreation and culture (-0.1 percent from -0.2 percent). Cost was flat for furnishing, household equipment and services (from -0.1 percent in the prior three months),

RBA Trimmed Mean CPI rose 1.8 percent year-on-year in the second quarter 2017, after gaining 1.9 percent in the preceding quarter and consistent with the market consensus. Quarter-on-quarter, the index increased 0.5 percent, the same as in the March quarter and in line with market estimates. RBA Weighted Mean CPI rose 1.8 percent year-on-year in the three months to June 2017, up from a 1.7 percent growth in Q1 and slightly above expectations of a 1.7 percent rise.

On a quarterly basis, consumer prices rose 0.2 percent, below 0.5 percent in Q1 and short of market expectations of a 0.4 percent increase. It was the lowest figure since the March quarter 2016. The most significant price rises this quarter are medical and hospital services (4.1 percent), tobacco (1 percent), beer (1 percent) and new dwelling purchase by owner-occupiers (0.9 percent). These rises were partially offset by falls in domestic holiday travel & accommodation (-3.2 percent), fruit (-4.4 percent) and automotive fuel (-2.5 percent).

ABS | Charles | charles@tradingeconomics.com7/26/2017 2:30:15 AM

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